Bertelsmann seeks suit dismissal

Media giant appeals in Napster case

This article was updated at 2:45 am. PT on July 21, 2003.

COLOGNE — Bertelsmann filed an appeal Thursday with the New York Federal Court to dismiss three legal actions brought against the company for its funding of Internet music purveyor Napster.

Bertelsmann was sued for $17 billion by songwriters Jerry Leiber and Mike Stoller, and later by EMI and Universal Music Group, for contributing to copyright infringement. The writers and labels claim Bertelsmann’s infusion of $85 million to the embattled Internet company helped maintain a channel for illegally downloaded songs.

Bertelsmann counters that its funding was aimed at transforming Napster into a licensed file-sharing service, in which other record labels were invited to participate. Conglom called the allegations “groundless and cynical,” given that its intentions were seen by many in the industry as a step toward transforming the unauthorized swapping of music files into a legitimate business that would compensate artists and labels.

Company asserts that copyright law does not permit recovery from a lender for damages the plaintiffs failed to recover from Napster. It referred to a California court’s dismissal of similar infringement claims against venture capital firm Hummer Winblad. Bertelsmann was never a controlling stakeholder in Napster, it emphasized.

Meanwhile, German weekly Spiegel reported last week that Universal had considered taking over Napster on behalf of the music majors. The plan was abandoned when Napster asked for an exorbitant price, reportedly $12 billion, Spiegel said.

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